Tag Archives: Resilience

Coastal resilience, or putting an insurance policy on nature

Our earlier post Working with nature to build resilience to hurricanes discussed how insurers look to natural infrastructure like coastal wetlands and mangrove swamps to mitigate storm losses.

The Mesoamerican Reef, which runs south for some 700 miles from the tip of the Yucatán Peninsula protects coastal communities and property by reducing  the force of storms, but its corals require continued repairs.

For every meter of height the reef loses, the potential economic damage from a major hurricane triples, according to The Nature Conservancy (TNC).

Now thanks to TNC and Swiss Re, the reef is about to get its own insurance policy.

From Bloomberg:

“After Hurricane Wilma struck in 2005, causing $7.5 billion of damage in Mexico, beachfront hotel owners began paying extra taxes to the state government to handle beach restoration and protect the reef.”

TNC has proposed a different approach:

“The extra money paid by the hotel owners to the government could be converted into premium payments to Swiss Re to cover the reef. The policy would be what’s called parametric insurance, in which a large hurricane would trigger near-immediate payouts. By having the money arrive quickly, reef repairs could begin sooner.”

From Artemis blog, via TNC:

“One of the most promising new developments to maximize the value of nature is the possibility of putting an insurance policy on habitats like reefs and beaches. By combining insurance and new science, we can protect and improving the health of reefs and beaches so they can continue to protect us.”

 

Property losses from severe convective storms spark focus on resilience

More than $14 billion. That’s the expected insured loss from severe convective storms, thunderstorms, tornadoes, large hail and associated damaging winds in the United States in the first six months of this year.

From the Artemis blog, via Impact Forecasting, the catastrophe risk modeling center at Aon Benfield:

“The insurance and reinsurance industry faces more than $14 billion of losses after the first-half severe storm activity in the U.S., while the economic loss is set for $22 billion or higher, putting 2017 as the fourth most costly year for both economic and insured losses due to convective weather activity.”

Check out the U.S. tornado count, 2017 from NOAA:

An important message on building resilience from Munich Re, as reported by Business Insurance:

“Munich Reinsurance America Inc. has released a tornado virtual reality experience tool to highlight the risks posed by tornadoes and the importance of embracing resiliency in building construction to help reduce future property losses.”

And:

Many building codes in the United States do not require a home to withstand more than a 90-mph gust of wind for three seconds, which is the equivalent of a weak EF1 tornado with wind speeds between 86 to 110 miles per hour.

Get Insurance Information Institute facts and statistics on tornadoes and thunderstorms here.

Get serious about the lightning threat from the Insuring Florida blog.

 

How to protect crops and property from hail

Damage to vineyards following several years of severe hailstorms in the famed wine-growing region of Burgundy, France, is prompting greater prevention efforts.

London’s Daily Telegraph reports that producers are protecting their entire grape harvest with a cloud-seeding system—a hi-tech hail shield that is designed to modify storm clouds and suppress hail formation.

The system works by releasing tiny particles of silver iodide into the clouds where they stop the formation of hail stones, thereby reducing the risk of damage.

Cloud-seeding, or weather modification, has been used for many years in parts of the United States and Canada not just to suppress hail, but to enhance rainfall and snowfall in some cases. Insurers are involved in the research.

This makes sense. According to the National Oceanic Atmospheric Administration, hail causes approximately $1 billion in damage to crops and property annually.

A monster hailstorm that pounded Colorado’s Front Range on May 8 is on pace to be Colorado’s most expensive insured catastrophe, with an estimated preliminary insured loss of $1.4 billion, according to the Rocky Mountain Insurance Information Association.

For auto, home and business owners living in hail-prone areas, taking steps to minimize hail damage to property is essential.

The Insurance Institute for Business and Home Safety (IBHS), is continuing a major multi-year research study into hailstorms. IBHS resources on preventing property losses are available here.

Ready For First Flakes In Northeast Blizzard?

In the words of the National Weather Service (NWS): “Things get interesting for the East Coast beginning Monday night.”

A strong nor’easter will cause a late season winter storm stretching from the central Appalachians to New England, with impacts for many of the big cities in the Northeast like New York City, Boston, Philadelphia.

Widespread winter storm warnings are now in effect for heavy snow accumulations. Blizzard conditions are expected for the NY/NJ metro areas, in addition to damaging wind gusts and coastal flooding, per NWS New York.

How much snow?

Via NWS NY blizzard briefing this morning:

Key preparation stats for New York alone, include:

  • The New York State Emergency Operations Center is activated with stockpiles of sandbags, generators, pumps and vehicles on standby.
  • New York City’s Department of Sanitation is pre-deploying 689 salt spreaders across the five boroughs. PlowNYC is activated (where you can track the progress of city spreaders/plow vehicles) and more than 1,600 plows will be dispatched when more than 2 inches of snow accumulates.
  • New York City Transit will monitor conditions for subways and buses via its Incident Command Center situation room, with 13,000 personnel on duty for subways during the storm, including more than 9,700 snow-fighting personnel.
  • Port Authority of New York and New Jersey has hundreds of pieces of snow equipment at the airports, including melters able to liquefy up to 500 tons of snow an hour and plows that can clear snow at 40 mph.

And insurers, too, are well-prepared and ready to respond to the needs of their policyholders.

Are you prepared? Check out Insurance Information Institute facts and statistics: winter storms and winter weather preparation tips.